This makes deciding how to approach compensation complicated no matter the makeup of your team, but with more companies embracing remote-friendly policies and expanding their hiring pool internationally, the layers of complexity naturally increase. In an effort to unpack all the competing arguments and intersecting elements, our Journalist, Bree Caggiati, is sharing a seven-part article series on Compensation for Global Teams.
Now that we’ve covered the main tenets of compensating overseas employees, including unpacking the major compensation philosophies, I wanted to give some more space to some of the surrounding issues too. Things like the community impact of foreign employment, bias and discrimination, and navigating international jurisdiction and compliance.
There are countless benefits of employing a global team, but that doesn’t mean there aren’t also potential issues, particularly when hiring in lower-cost locations. In this article, I’ll be talking through some of the impacts globalization has had on smaller economies worldwide and attempt to add my thoughts on the ethics of multinational corporations hiring in lower-cost countries.
Hiring international employees to save costs
As I’ve covered elsewhere in this series, there are a host of benefits for hiring overseas employees. Many employers are looking for on the ground experts as they enter new markets, others are wanting to create local teams for their international entities or fill in timezone blocks so that they can service clients worldwide. International teams foster diverse cultures with unique perspectives, thinking, and skills.
Hiring internationally also grants access to different markets, which for Western companies can mean lower cost employment.
Now, it’s not news that for-profit companies are interested in cost-saving and I don’t think this is fundamentally unethical in and of itself. But I am interested in dissecting how the choice to hire from lower-cost labor markets could allow for unethical practices. Particularly in how it so closely connects to ideas around globalization, power dynamics, discrimination, or bias in the workplace.
While I don’t think cost is always the reason employers choose to hire internationally, I’m curious whether this can be discounted entirely, particularly in instances where Western companies hire exclusively from emerging markets or outsource entire departments. And wonder whether the impact on local communities, industries, and the inbuilt power disparity in these circumstances should be more significant in discussions around compensation at large.
How varying cost of living creates a disparity in employee experience
Often companies who pay a global rate to all employees regardless of their location do so with the intention of... read more
Shield GEO makes international employment simple. Our customers use Shield GEO to employ and payroll hundreds of workers in over fifty countries. Find out more.
Please sign in or register for FREE
If you are a registered user on The Forum for Expatriate Management, please sign in